VAT—European legal principles
Produced in partnership with Etienne Wong of Old Square Tax Chambers
VAT—European legal principles

The following Tax practice note produced in partnership with Etienne Wong of Old Square Tax Chambers provides comprehensive and up to date legal information covering:

  • VAT—European legal principles
  • EU legal principles
  • Fiscal neutrality
  • Fiscal neutrality—Member State discretion
  • Proportionality
  • Legal certainty and the protection of legitimate expectations
  • Equivalence
  • Effectiveness
  • Establishing breach
  • Challenging a breach—the European Commission
  • More...

For EU Member States, Council Directive 2006/112/EC (the VAT Directive) lays down the infrastructure for a common VAT system, which each Member State is required to implement in its home territory by means of domestic legislation. This domestic legislation must not only implement the VAT Directive correctly, but must do so, and must be applied, in a manner that complies with a number of EU legal principles (also known as EU general principles).

These requirements applied in the UK while it was bound by EU law, ie until the end of the Brexit implementation period on 31 December 2020 (IP completion day). Following IP completion day, these requirements did not simply fall away. The VAT Directive does not come within the definition of EU retained law, and so does not form part of UK domestic law, but certain rights under Directives persist. Likewise, EU legal principles have remained relevant in the UK since IP completion day, but their application is restricted. For a full discussion, see Practice Note: Brexit and tax—the continued application of EU law.

References in this Practice Note to judgments of the EU Court of Justice are to judgments that were decided before IP completion day, unless stated otherwise.

This Practice Note is about EU legal principles that regularly arise in a VAT context. It also considers how the European Commission and/or taxpayers can

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